BOI, SMEDAN, NEXIM Appoint Ratings Agency for MSMEs

Waheed Olagunju
Acting Managing Director, Bank of Industry (BoI), Waheed Olagunju

Senator Iroegbu in Abuja

The Bank of Industry ( BOI), the Small and Medium Enterprises Development Agency of Nigeria (SMEDAN) and Nigeria Export – Import Bank (NEXIM) have hired the services of a ratings agency, Dun & Bradstreet Nigeria Limited to conduct ratings on micro, small and medium scale enterprises (MSMEs) in the country.

To this end, a memorandum of understanding (MoU), authorising the ratings firm to conduct due diligence analyses on all existing SMEs in Nigeria, was signed yesterday in Abuja by the three agencies with Dun & Bradstreet Limited.

The Minister of State for Industry, Trade and Investment, Hajiya Aisha Abubakar, who presided over the signing of MoU, said: “Currently Nigeria has over 37 million SMEs with most of them, adjudged unviable due to challenges which include, lack of access to finance , poor infrastructure, which make SMEs susceptible to early moribund.”
Abubakar lamented that SME sector is beset with numerous challenges, especially access to finance.

She however expressed confidence that the coming of the ratings agency is a good development that would spur SMEs’ growth in Nigeria.

She added: “Access to finance has been an age long challenge to MSMEs and despite the various interventions put in place to facilitate funding for this sector, little impact is made on the expansion of these enterprises.

“The proposed credit rating agency will compliment this effort by providing an objective opinion on the potentialities and credit worthiness of MSMEs. A rating agency typically should design scoring solutions for SMEs, typically A, B,C,D, E etc.”

“Financial institutions will use this rating to decide the kind of relationship they will develop with the SMEs in granting loans such as the amount to be granted, the price ( rate of interest) it will agree upon and the level of security/ collateral required, if any. We strongly hope that this will not incur additional costs and bureaucracy to accessing finance by MSMEs,” she added.

While lauding the efforts of three government agencies in coming up with the novel idea, the minister said the creation of specialised and effective enterprise rating platforms was intended to reduce the turnaround time in accessing funds by MSMEs and other critical resources.

“So it’s a deliberate effort to have invited all stakeholders here at this roundtable to mutually discuss the viability and also provide an opportunity to harvest inputs that would facilitate the seamless commencement and operations of a rating agencies,” she stressed.

Earlier, the BOI Managing Director, Mr. Kayode Pitan described the appointment of the ratings agency to conduct due diligence analysis on all SMEs as very important.